1. Expressing plans for a business in financial terms is commonly called:

master planning.

budgeting.

strategic planning.

2. The master budget normally covers:

Three months.

1 year.

1-5 years.

5-10 years.

operational planning.

3. Which of the following budgets needs to be prepared prior to preparing a purchases budget?

Selling and administrative expense budget

Sales budget

Cash budget

All of these answers are correct.

4. Markham Company has completed its sales budget for the first quarter of 2014. Projected credit sales for the first four months of the year are shown below: The company's past records show collection of credit sales as follows: 40% in the month of sale and the balance in the following month. The total cash collection from receivables in March is expected to be:

$18,000.

$45,000.

$41,400.

$39,600.

5. Skymont Company wants an ending inventory each month equal to 30% of that month's cost of goods sold. Cost of goods sold for February is projected at $45,000. Ending inventory at the end of January was $12,000. Based on this information, purchases for February would be:

$31,500.

$46,500.

$43,500.

$33,000.

January February March April $30,000 $36,000 $45,000 $48,000